What Is Involved In a Bankruptcy Hardship Discharge of Student Loan Debt?

Question:

I filed for ch. 7 bankruptcy and discharge was granted and the case was closed. A few months after, I realized I should’ve filed an adversary proceeding to seek the discharge of my student loan debt. I read that a bankruptcy case can be reopened for up to a year after it’s closed, and this is permitted under 11 USC 350.

Can I reopen the case to file an adversary proceeding, in which I will seek to discharge my student loans? 11 USC 350 (b) says a case can be reopened “for other cause” but I haven’t found any cases or information about this being done where a file has done this.
If you can, please mention some case law, statutes, etc. that say I can or can’t do this, so I can follow-up on my own. Thanks in advance.

Answer:

To answer your specific question, I can do you one better! You DO NOT need to reopen your closed bankruptcy to file an Adversary Proceeding to discharge student loan debt. An adversary proceeding is its own case separate from the underlying bankruptcy; the case gets its own case number and has its own rules. See Section VII of the Bankruptcy Rules of Procedure for the rules governing Adversary Proceedings. Note, you will want to check your bankruptcy districts Local Bankruptcy Rules of Procedure and any local general procedure orders that are usually on your bankruptcy court’s website. The student loan debt (or at least that portion which was borrowed prior to you filing bankruptcy) is always a part of the underlying bankruptcy and an adversary proceeding can be sought at any time thereafter.

However, I would be remiss if I did not at least warn you of the difficulties and tribulations you face in attempting to discharge student loans in bankruptcy; and those difficulties will be double if you are attempting student loan discharge without an attorney. Student loan discharge cases are full blown litigation cases culminating in trial. Are you really prepared for that eventuality? We are talking about presenting evidence, calling and questioning witnesses etc. Student loan discharge cases do not entail filing out a few forms and simply getting up and telling your story to the judge for 30 minutes (or, at least, if you really want to have any shot at actually succeeding). Even if the other side doesn’t respond to the adversary complaint (not likely), the bankruptcy court judge still needs to issue findings of fact that justify student loan discharge. So unless you have at least 2 witnesses, (a) one to testify as to the nature of your hardship, and (b) the other to testify that your hardship means you cannot pay something back to your student loans over the next 15-25 years (and, by the way, have you exhausted your administrative remedies and attempted other programs to repay the debt), and know how to question and properly admit that evidence in court; then you might as well not even start. There are published cases denying student loan discharge even when the student loan lender didn’t appear to defend the case.

If someone is actually serious about discharging student loans, they won’t go it alone. But I certainly understand the catch 22; student loan discharge cases are expensive (but compared to the cost of other types of litigation, what attorneys will charge for student loan cases is CHEAP). But given the life changing benefits of successfully discharging student loans, why do it on the cheap? Most bankruptcy attorneys, about 90%, are incapable of doing a student loan case; so the self-represented debtor (pro se) has almost zero chance; the odds of a pro se debtor successfully discharging student loans is better than winning the lottery, but not by much. But, if you have time on your hands, are willing to do the homework (and I am not just talking about learning the Brunner case, but learning the ins and outs of how to actually litigate), I wish you the best.

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